Virgin runs loss-making 'strategy directed at weakening Qantas'

Qantas CEO Alan Joyce says there is little the airline can do to compete effectively against loss-making rivals.

Testifying at a Senate inquiry into the future of the airline, Mr Joyce says Qantas has outperformed its rivals domestically.

"In the domestic market, Qantas and Jetstar have outperformed the competition in every year over the last five years," he told the committee.

"Qantas and Jetstar have been profitable and our competitor is losing more money proportionally.

"Tiger, who entered this market seven years ago has lost money every year since it began operating in this market.

"If you've got two competitors that have come in and are willing to lose money in the marketplace, and are willing to be funded from three state owned airlines, then it doesn't matter what you do as a company, you still are going to get hit in terms of profitability."

"It would be naive for anyone to think that these sovereign airlines don't have an agenda in bankrolling our competitor, they do," he said.

"It is a strategy directed at weakening Qantas and promoting the interests of Virgin's foreign owners."

'No role for government'

Earlier in the day, the inquiry into the future of Qantas heard that a Federal Government debt guarantee would not have saved the jobs of 5,000 employees.

Ian Thomas from aviation consulting firm CAPA told the inquiry he has been observing Qantas for 20 years and does not think there is an immediate role for government.

The Senate inquiry is considering whether the Federal Government should offer the company a cash injection, a debt guarantee or other forms of help including removing foreign ownership restrictions.

Mr Thomas says a debt guarantee would not make a difference.

"I think at this stage Qantas is working through its issues and I think, as far as management's concerned, it needs to be able to do that, it needs an environment which will enable it to do that," he told the committee.

"At the same time I don't think there's a role for government immediately."

Workers in the dark

The Transport Workers Union says that the Qantas workforce, and the company itself, do not know from where the airline will slash the 5,000 jobs it said last month that it was cutting.

TWU national secretary Tony Sheldon says Qantas is running the airline in the cheapest and nastiest way it can, including paying some workers $200 below the minimum wage.

Mr Sheldon has told the inquiry into the airline's future that Qantas would prefer to churn and burn staff than offer full-time jobs.

"There is not full time jobs anymore and they're offering voluntary redundancies for full-timers as well as the intent to have forced redundancies where they can to make sure they get their 5,000 mark," he said.

Linda White from the Australian Services Union says she is also in the dark about which staff are being sacked.

"Exactly the numbers I can't say at the moment ... we haven't been told," she said.

Qantas chief executive Alan Joyce is due to front the committee at 12:15pm (AEDT).